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Credit vocabulary
Question | Answer |
---|---|
Character | reputation for paying debts on time |
Capacity | ability to pay debts |
Capital | net worth of a person |
Character/Capacity/Capital | three Cs of credit |
Annual Fee | yearly charge similar to a membership fee |
Annual Percentage Rate | the cost of credit expressed as a yearly rate |
Finance Charge | the dollar amount paid to use credit; includes interest and all charges associated |
Periodic Rate | the interest rate the card issuer applies to your outstanding account balance to figure the finance charge for each billing cycle |
Transaction Fees | some credit card issuers charge a fee for a cash advance, late payment and exceeding your credit limit |
Creditor | person who lends money or sells goods based on another person’s promise to pay later |
Debtor | person who borrows money or buys goods promising to pay later |
Credit Rating | evaluation of one’s ability and willingness to pay debts |
Credit History | report of your financial transactions |
Credit Bureau | agency that provides information about one’s credit history to businesses |